Industria de Fundicao Tupy v. US

• Decision Date: 22 July 1996
• Docket Number: Slip Op. 96-113. Court No. 95-09-01160.
• Citation: 20 CIT 875,936 F. Supp. 1009
• Parties: INDUSTRIA DE FUNDICAO TUPY and American Iron & Alloys Corp., Plaintiffs, v. The UNITED STATES, Defendant, and Grinnell Corporation, Ward Manufacturing, Inc., and Stockham Valves & Fittings Co., Inc., Defendant-Intervenors.
• Court: U.S. Court of International Trade

936 F. Supp. 1009

20 CIT 875

INDUSTRIA DE FUNDICAO TUPY and American Iron & Alloys Corp., Plaintiffs, v. The UNITED STATES, Defendant and Grinnell Corporation, Ward Manufacturing, Inc., and Stockham Valves & Fittings Co., Inc., Defendant-Intervenors.

Slip Op. 96-113. Court No. 95-09-01160.

United States Court of International Trade.

July 22, 1996.

COPYRIGHT MATERIAL OMITTED

Sonnenberg & Anderson, Philip Yale Simons and Jacqueline Paez, New York City, for plaintiffs.

Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director; Rhonda K. Schnare, U.S. Department of Justice, Civil Division, Commercial Litigation Branch; Michelle K. Behaylo, of counsel, Office of Chief Counsel for Import Administration, Washington, DC, for defendant.

McKenna & Cuneo, L.L.P., Lawrence J. Bogard and Peter Buck Feller, Washington, DC, for defendant-intervenors.

MEMORANDUM AND ORDER

I INTRODUCTION

WALLACH, Judge:

This case tests whether a foreign exporter to the United States may force the government to use low antidumping rates determined in an initial less-than-fair-value ("LTFV") investigation by refusing to provide updated information for an administrative review. Plaintiffs, Industria de Fundicao Tupy ("Tupy"), the sole exporter of malleable cast iron pipe fittings from Brazil, and American Iron & Alloys Corporation ("American Iron"),¹ challenge the final results of the International Trade Administration, Department of Commerce ("ITA" or "Commerce"), of the first administrative review of a 1986 antidumping duty order. Final Results of Administrative Review; Malleable Cast Iron Pipe Fittings from Brazil, 60 Fed.Reg. 41,876 (August 14, 1995) ("Final Results"). Because Tupy refused to cooperate in the administrative review, Commerce used the simple average of the rates from the initial 1985 petition as best information available ("BIA") for the first administrative review period, even though in 1986 the ITA had calculated a lower margin in the less-than-fair-value ("LTFV") investigation. The Court has jurisdiction under 19 U.S.C. § 1516a(a)(2)(A)(i)(I) (1988) and 28 U.S.C. § 1581(c) (1988).

For the reasons discussed below, the Court holds that Commerce's choice of BIA is proper. This is an unusual situation where the only respondent to an administrative review was the sole participant in the initial antidumping duty determination. The Court will not allow respondent to cap its antidumping duty rate by refusing to provide updated information to the ITA. Moreover, because all related information was uniquely within the sole possession of Tupy, Commerce was justified in its decision to use data from the initial antidumping petition as the basis for its updated margin calculation.

II BACKGROUND

In 1985, the Cast Iron Pipe Fittings Committee, on behalf of the domestic producers of pipe fittings, filed a petition seeking an antidumping investigation of malleable cast iron pipe fittings from Brazil. See Malleable Iron Pipe Fittings from Brazil; Initiation of Antidumping Duty Investigation, 50 Fed. Reg. 34,730 (August 27, 1985) ("Initiation 1985"). The investigation was conducted only with respect to Fundicao Tupy, S.A., the sole exporter of malleable cast iron pipe fittings from Brazil.²

Commerce concluded that Tupy was dumping pipe fittings during the period of investigation ("POI"), February 1, 1985 through July 31, 1985, at a margin of 5.64 percent. Malleable Cast Iron Pipe Fittings, Other than Grooved, from Brazil; Final Determination of Sales at Less Than Fair Value, 51 Fed.Reg. 10,897 (March 31, 1986) ("Final Determination"). After the U.S. International Trade Commission ("ITC") determined that the malleable cast iron pipe fittings from Brazil were a cause of material injury to the competing domestic industry, Certain Cast Iron Pipe Fittings from Brazil, Korea, and Taiwan, 51 Fed.Reg. 18,670 (May 21, 1986), Commerce published an Antidumping Order (the "Order") against Malleable Cast Iron Pipe Fittings from Brazil, 51 Fed.Reg. 18,640 (May 21, 1986), which required importers of Brazilian pipe fittings to deposit estimated duties at an ad valorem rate of 5.64 percent.

On July 15, 1994, Commerce initiated the first administrative review of this Order, Initiation of Antidumping Administrative Review and Requests for Revocation in Part, 59 Fed.Reg. 36,160, based on the request by three domestic manufacturers, Grinnell Corporation, Ward Manufacturing, Incorporated, and Stockham Valves and Fittings Company, Incorporated ("Petitioners"). Public Document to the Administrative Record ("Pub.Ad. Rec.") at Fiche 2, Frame ("Fr.") 1. Commerce sent its standard administrative review questionnaire to Tupy, requesting data on its sales and its selling prices in the United States and Brazil for the May 1, 1993 through April 30, 1994 period of review ("POR"). Pub.Ad.Rec. at Fiche 3, Frs. 7, 9.

Tupy failed to respond to the questionnaire, and instead, requested either revocation of the Order or postponement of the review. Pub.Ad.Rec. at Fiche 5, Fr. 1. On September 9, 1994, the Court granted an exparte Temporary Restraining Order, sought by Tupy, enjoining Commerce from conducting the administrative review. Defendant-Intervenors' Brief in Opposition to Plaintiffs' Motion for Judgment on the Agency Record at appendix B. The Temporary Restraining Order was dissolved on October 6, 1994, following the denial of Tupy's motion for a Preliminary Injunction barring Commerce from conducting the administrative review. Industria de Fundicao Tupy v. Brown, 866 F.Supp. 565 (CIT 1994).

In a letter to Commerce dated October 31, 1994, Tupy expressly refused to provide the information requested in the questionnaire, stating that "... the disruption of our on-going business, the fact that our records are not computerized in the format required by the ITA, and the potential benefits derived from our insignificant exports to the United States do not justify the time and expense related to compiling the information and completing the questionnaire." Pub.Ad. Rec. at Fiche 5, Fr. 26.

When Tupy refused to provide information to Commerce, Petitioners urged Commerce to base the administrative review on BIA, and to use "the simple average of the dumping margins alleged in the Petition that resulted in the Order under review, specifically, 34.65 percent." Pub.Ad.Rec. at Fiche 5, Fr. 33. Tupy agreed that Commerce must use BIA, but argued that Tupy's existing dumping margin was the best information available.³

Commerce preliminarily based BIA on Tupy's estimated duty deposit rate. It noted that "because Tupy refused to respond to our requests for information ... we have used the highest rate ever found in this proceeding to establish its margin. This rate is 5.64%." Certain Malleable Cast Iron Pipe Fittings From Brazil; Preliminary Results of Antidumping Administrative Review, 60 Fed.Reg. 9,821 (Feb. 22, 1995) ("Preliminary Results").

In an administrative case brief submitted to Commerce on March 24, 1995, the domestic manufacturers reiterated that BIA should be based on the simple average of the dumping margins alleged in the petition, and also suggested that if Tupy's 1985 dumping margin were used as the basis for BIA, it should be adjusted upward to reflect changes in exchange rates, resulting in a dumping margin of 38.84 percent. Pub.Ad.Rec. at Fiche 7, Fr. 16. In response, Tupy restated its earlier argument that BIA should be based on Tupy's dumping margin from the 1985 POI.

On August 14, 1995, Commerce published the Final Results, in which it stated:

upon review of the comments our choice of a rate to use as first-tier BIA a rate of 5.64 percent has changed. In this case, Tupy is the only company to have ever been reviewed or investigated, and we have only calculated one margin, which was in the less-than-fair-value (LTFV) investigation. Due to the unusual situation, we have determined to use as BIA the simple average of the rates from the petition.

60 Fed.Reg. at 41,877.

Commerce reasoned that Tupy's refusal to respond to the questionnaire, "leaves unanswered a legitimate question as to whether the firm dumped subject merchandise ... to a greater or lesser extent than in the past." Final Results, 60 Fed.Reg. at 41,878. It expressed concern that Tupy might be relying on Commerce's normal BIA practice which would cap Tupy's dumping rate at the 5.64 percent LTFV rate, that the capped rate would allow Tupy to practice injurious price discrimination without adverse consequences, and that it would have no incentive to cooperate in any future review. Id.

Thus, Commerce decided to use the simple average of rates from the initial petition as BIA in the administrative review. Id. at 41,878. It concluded that importations of Tupy's pipe fittings during the period of May 1, 1993 through April 30, 1994, should be assessed antidumping duties at a rate of 34.64 percent.⁴ Id.

Tupy and American Iron filed this action on September 12, 1995, contesting Commerce's use of the simple average of rates found in the petition as BIA, and seeking remand to the ITA to amend the final determination in the antidumping administrative review, and use the published 5.64 percent rate as BIA in accordance with the ITA's standard methodology. In the alternative, they ask to remand this matter to the ITA for further analysis and consideration, including 1) providing detailed reasons for departing from standard practice of using published rates as BIA in antidumping duty administrative reviews; 2) considering and using the information obtained by the ITA in the original investigation in its determination of what constitutes BIA in this administrative review, or to provide detailed reasons for failing to consider and use this information; and 3) providing detailed reasons in support of its determination if it chooses upon remand to select unverified estimates of margins over verified margins in its determination of what constitutes the best information otherwise available in...